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WASHINGTON: The US Navy is considering terminating the construction of a shore-hugging ship being built by Lockheed Martin Corp. due to cost overruns, Navy chief Adm. Mike Mullen said on Thursday.
In January, the Navy took the unusual step of ordering Lockheed to halt work for 90 days on the littoral combat ship (LCS) because of soaring costs.
Mullen said Navy Secretary Donald Winter would decide in the next couple of weeks on a plan for the ship, known as LCS-3 as it is the third in line to be constructed.
Lockheed was ordered to stop work because of cost overruns on the first of the new ships, LCS-1, which the company is also building. General Dynamics Corp. is building the second and fourth ships.
“We've got to sort out where we are before we make a decision on whether or not we continue LCS-3,” Mullen, the Navy's top military officer, said at a breakfast meeting with defense reporters.
“In the next couple of weeks Secretary Winter will make a decision on how to proceed with respect to the program, including … whether to move to a termination or to continue the program for LCS-3,” he said.
Asked how seriously the Navy was considering termination, Mullen said, “All options are on the table right now.”
He added, “I couldn't tell you which way it's going to go at this point. I really don't know.”
The Navy has said the first Lockheed LCS ship will cost $350 million to $375 million, far above initial estimates of $220 million for each of the new ships.
Lockheed spokesman Craig Quigley said the company was working closely with the Navy to help analyze the cost overruns on LCS-1 and was hopeful of resuming work on LCS-3.
“We want to get back to work,” Quigley said. “We're sure hopeful that we can.”
The Navy eventually wants to buy about 55 of the ships, designed to operate in shallow waters to hunt for submarines and destroy underwater mines.
The Navy said last week that the LCS being built by General Dynamics is also expected to face cost overruns, although the scope of the overruns is not yet clear.
